An interesting discussion regarding automation and employment came up recently, which posed two questions. Given the likelihood of more robots doing the work of humans, 1) Can we find fulfilling ways to spend our time? And, 2) Can we find a stable and fair distribution of income?
1) Much of my concern is finding fulfilling ways to spend our time, only this process needs to be expressed in economic terms. Why? Once money is introduced into any social setting, it becomes increasingly difficult for people to maintain informal and reliable constructs of activity, which are not somehow reinforced by money. And many valuable (potential) applications of our time have become difficult to express, via the economic choices we presently have.
2) I've argued for local defined equilibrium settings, in part because I do not believe "fair" redistribution is possible in general equilibrium. Large economies in particular, are already stretched in general equilibrium terms (as ongoing tight monetary conditions have made evident), by time based knowledge product claims on commodity income. These already existing service based claims not only crowd tradable sector output, but would complicate matters further, if more redistribution claims (basic income) were made on the same base of wealth origination. Which is an important reason I've suggested making knowledge use an integral component of the commodity wealth base, via time value.
As to the likelihood of future automation, some further thoughts. Some groups have both incentive and market power to ensure that robots do not meaningfully cut into the value of their high skill time. These groups intend to preserve their claims wherever possible. And even though low skill workers lack the market power to preserve their positions, not all firms will have the incentive to automate tasks, when potential workers live nearby who are willing to work for small wages.
The Fed continues to work with a framework which makes inflation appear as though a mystery.
Thinking is also something you get to do for pleasure.
"Our primary policy focus must not merely be helping the poor or the marginalized "other", but rather restoring them to a position in which they are needed - in which they are necessary, integral participants in our economy, our communities, and our collective imagination."
From Kevin Bryan, a paper on innovation, plus required class material for innovation and technology
What are some of the current incentives for near future automation? Timothy Taylor also takes a look at robot stock.
When the public chooses "cures" that are worse than the disease.
Much of the lost lead in education is due to the declining general equilibrium position of matched resource capacity as a wealth origination position. Worse, we have excessive competition for knowledge use compensation, in dependent parts of the system that are not resource matched at the beginning of the process.
In "We're About to Fall Behind the Great Depression", David Leonhardt references a presentation from Olivier Blanchard and Larry Summers at the Rethinking Macroeconomic Policy conference.
By no means is non tradable sector intransigence re housing requirements, limited to the U.S.
From Christina and David Romer:
"Why Some Times are Different: Macroeconomic Policy and the Aftermath of Financial Crisis"
It only took ten years for discretionary spending to return to its previous level...
Scott Sumner imagines an island economy to make some basic macro points in these two posts.
Why does the Fed have limited power over its liability side?
"The forces that drive regional disparities are built into the mechanisms of globalisation, which make them hard to resist."
"Mutual respect is the only way to heal our divided politics."
From Gregory Mankiw and Ricardo Reis:
Friedman's Presidential Address in the Evolution of Macroeconomic Thought
Are larger cities more resilient to technological unemployment?
Where is government money going?
When all else fails, agricultural growers will also rent land in Mexico...
The future is multiple
Some thoughts on this post from Dietrich Vollrath, in response to "Investment is lower than you'd expect given profits". First, consider where profits are now more likely to originate, in (general equilibrium dependent) knowledge based endeavour which continues to crowd commodity based prior wealth formation. Since output is constrained in tradable sector activity, there is relatively less investment in these sectors, especially since aggregate spending representation on the part of central bankers, might not accurately reflect said output efforts.
Equally important, is that the investment required for the additional augmentation of time based product, is intended mostly to maintain a relative constant, given tight monetary conditions. Again, investment for high skill time based services, need not be exponential or replicative to achieve gains in the same sense as tradable sector production. And this form of (non tradable sector) investment is more likely to benefit individuals, rather than groups of employees.
Will the U.S. embrace prefabricated housing?